Superbrands case studies: The National Lottery

Originally published in 'Consumer Superbrands Volume IV, May 2001'. The book reviews the UK's strongest consumer brands as judged by the independent Superbrands Council.

Case study provided by the Superbrands organisation.

Market

The launch of The National Lottery in November 1994 signified a radical transformation in the nature and size of the UK gaming industry. Overnight, gaming was transformed into a part of everyday life for a large proportion of the population. The lottery was positioned as a 'harmless flutter' which could be enjoyed by all adults in the UK.

The National Lottery has undoubtedly had an impact on other areas of the gaming market. Whilst it has taken market share away from its competitors, including bingo and pools operators, it has also been instrumental in increasing the size of the gaming market as a whole. The UK gaming market is worth £26 billion and the National Lottery accounts for around 20% of this market.

Achievements

The National Lottery has been a massive success. The National Lottery Online game (the technical term for the Saturday and Wednesday draws), Thunderball and Instants, have become an integral part of everyday life. They have drastically altered people's perceptions of gaming and created a new and powerful structure for raising money for good causes around the country.

It took only eighteen months after the launch for Camelot to establish the world's most efficient lottery and the UK's biggest consumer brand with sales by March 1998 totalling more than £13 billion. The Henley Centre concluded after just fourteen weeks that The National Lottery represented 'the most dramatic product launch in British history'.

The lottery quickly became a national institution with more than 60% of the country playing regularly. It is estimated that more than 90% of the UK adult population has played at least once. By the end of its first week, the National Lottery had raised £12 million for the five 'good causes' chosen by Parliament - Sports, Arts, Heritage, Charities and the Millennium.

In just five years The National Lottery has grown to become a national institution. From its expanding portfolio of games including Instants, Thunderball and Big Draw 2000, The National Lottery has made a significant contribution to the future of British society through the money raised for the good causes.

Further achievements include being voted 'Brand of the Year' in 1995 by The Marketing Society for the launch of The National Lottery and being ranked as the most efficient lottery in the world for four consecutive years by the La Fleur's World Efficiency Study.

History

In March 1992 the government proposed the creation of a UK National Lottery. The aim was to provide designated 'good causes' in the UK with a huge injection of funds. With this objective in mind, the government put the operation of the UK lottery out to tender. Eight organisations applied and in May 1994, after a lengthy review of all applications, the government announced that Camelot Group plc had won the tender and would run the lottery for its initial seven year license. Camelot had committed to raise £9 billion for good causes, a commitment achieved in October 2000 and subsequently increased to £10.5 billion.

Camelot Group plc was a consortium set up by five separate companies - Cadbury-Schweppes, De La Rue, GTECH, Racal Electronics and ICL. Each company brought important expertise to the successful running of The National Lottery.

Winning the license was only the first step in what was to be a very long road. The newly formed company had just 24 weeks to set up the lottery from scratch and would be fined £1 million a day for any delay.

Camelot faced three major hurdles to launch the lottery: technical requirements, establishing a retailer network, and a communications strategy. Camelot created the largest communications network in the UK, equivalent to the four biggest high street banks combined. The network was capable of processing up to 400,000 transactions per minute, while its software equated to 200 person years of software development time.

Retailers needed to have terminals installed. More than 10,000 retailers were selected by Camelot to have terminals installed in their premises. These included multiple and independent retailers, forecourt operators, off licenses and post offices.

By launch, at least 93% of the UK adult population lived or worked within two miles of a lottery outlet. Each of the 10,000 retailers needed trained operators and this required 80,000 individuals to be trained between September and October 1994. Camelot set up ten regional centres to train retailers and act as payment centres for major winners.

Getting the communications and education right at launch was essential: the public had to understand and believe in the brand and be inspired to purchase National Lottery tickets. The National Lottery was launched with the now famous advertising campaign featuring the slogan 'It Could Be You' and the 'Hand of Good Fortune' acting as the random hand of luck.

Product

The National Lottery Game remains the largest component of The National Lottery portfolio. Players can win from £10 to £7 million or more. Twice weekly, the lottery balls are drawn randomly on the BBC produced National Lottery Show. The first show attracted more than 22 million viewers.

If no one wins the draw jackpot, it rolls over to the next consecutive draw up to a maximum of three times. If there is no jackpot winner on the fourth rollover draw, the jackpot is shared between players who have matched five numbers plus the bonus ball. The jackpot has rolled over many times, including five double rollovers but there had never been a triple rollover at the time of writing.

From time to time the jackpot is boosted to increase player interest. These 'Superdraws' are often themed: for example, the 'Christmas Superdraw' in 1997 had a guaranteed minimum jackpot of £25 million, while the 'Building Superdraws' in April 2000 offered a series of jackpots that increased from £10 million to £15 million and to £20 million.

National Lottery Instants was launched in March 1995 and became the biggest impulse brand in the UK. It consists of a variety of themed cards, with different prize levels and odds of winning. Players simply scratch off the latex play area to find out if they have won from £1 up to £100,000.

A second National Lottery Game draw was launched on Wednesdays in 1997. The first eight weeks saw total sales rise by 28%, with weekly sales of around £28 million.

Recent Developments

Thunderball, a new online game, was launched in 1999. This was designed to play a complementary role in the Online portfolio by offering a smaller fixed top prize (£250,000) and also better odds of winning a prize.

It aimed to provide a very different playing experience, revolving around the last ball to be drawn (the Thunderball) and holding players in the game for longer. Thunderball's launch was highly successful with the first draw taking sales of £6.4 million, nearly £2 million above budget. The game has achieved weekly sales of more than £4.7 million, making it the second largest little lottery game of its type in the world.

By October 2000 Thunderball had achieved total sales of £321 million, contributed over £98 million to good causes and paid out more than £170 million in prizes to over seventeen million lucky winners.

National Lottery Big Draw 2000 was launched as a special draw to mark the celebration of the new millennium. The game involved two draws and both had a strong link to the millennium through the selection of special years. National Lottery Big Draw 2000 was an enormous success. The predicted sales target of £75 million was surpassed at £80.6 million. Big Draw 2000 created more millionaires in one night (eighteen) than any other lottery in the world and was an event played by more than sixteen million adults. It also raised £22.3 million for good causes in one night. With the launch of Big Draw 2001 in December 2000, this game looks set to become an annual event.

The next online game, Lottery Extra, was launched in November 2000. Lottery Extra is a jackpot only game which means that if no one wins, the jackpot will continue to grow until it reaches £50 million, thus giving players an extra chance to win it big.

Camelot has emphasised the importance of new media in its marketing mix by investing in an internet site - www.national-lottery.co.uk which provides an important source of information for all aspects of National Lottery games.

Promotion

Few advertising campaigns of the 1990s will be remembered as well as the 'It Could Be You' campaign. The 'Hand of Good Fortune' image conveyed the central idea that chance was the motivating factor behind the lottery.

The launch saw a marketing campaign on an unprecedented scale with more than £39 million spent on television, radio, press, poster, point-of-sale and direct mail packs. By November 1994 approximately 40 million adults had seen the commercial at least thirteen times. The direct mail push was the largest recorded and sent to 21.8 million homes.

The launch of The National Lottery was a resounding success. Marketing magazine concluded: "The National Lottery took the country by storm in 1995 - it is by far the leading brand in both Adwatch of the year tables - the highest total recall during the year and the highest single awareness figure recorded."

Professor Barwise, Director of the Centre of Marketing at the London Business School, who led an independent audit looking at the lottery, concluded: "The launch of The National Lottery has been a clear marketing success. I believe this has not been a matter of mere good luck, but instead reflects the high quality of marketing analysis and planning in the successful application."

Four years after its successful launch, it was time to refresh the brand. In the past the advertising had largely focused on the prospect of winning with the strapline, 'It could be you.' However, after four years fewer and fewer people believed 'it could be them' and it was time to update this famous campaign.

Advertising needed to inject a renewed sense of enthusiasm, optimism and enjoyment about playing the main National Lottery Game, whilst also delivering a sustainable product truth. A change in direction from focusing on the probability of winning to the more realistic possibility of winning was heralded by the new slogan, 'Maybe, just Maybe.'

The launch of the new advertising campaign in November 1998 saw more than just a change in the slogan. It coincided with television advertising which for the first time featured some of the beneficiaries of the good cause funds. The advertising aimed to challenge the widespread misconceptions about how lottery money was spent and to encourage the general public to reassess its value to the betterment of the nation.

National Lottery advertising has not, however, been confined to the flagship twice-weekly draws and the good causes which they benefit. It has also supported new product development including the launch of Thunderball in 1999. This game was given its own distinct identity through a campaign focusing on the excitement of playing an online game that offers a better chance of winning. This was brought to life through the dramatisation of the big red Thunderball.

Instants also returned to television screens with a vox pop campaign featuring National Lottery retailers recounting stories of customer wins and the message 'Anyone can win in an Instant.'

Brand Values

The National Lottery has become part of British daily life and the brand is trusted, as well as respected by many. The random elements of the online game -- where lives can be transformed by winning -- gives the brand a magical quality. The National Lottery makes dreams come true. The Instants brand is light hearted. It provides the opportunity for people to have a break from everyday life and have fun -- instantly.

Things you didn't know about: the National Lottery

--National Lottery Instants is the eighth largest instant lottery game in the world and one of the largest impulse brands in the UK, eclipsing sales of Walkers crisps and Nescafe.

--National Lottery Thunderball is the second biggest 'Cash Lotto' (or little lottery) game in the world.

--National Big Draw 2000 created more millionaires in one night (eighteen) than any other lottery. This was a world record.

--The National Lottery has raised more than £9 billion for good causes -- an average of £28 million a week.

--The National Lottery Game is the second biggest lottery game in the world and has created more than 1000 millionaires.

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